Financial Choices: A Stimulus Story

Financial decisions can be tough.

It’s been an interesting time these past few weeks, hasn’t it?

If you’re anything like my clients, you’ve been bewildered by the rapid flow of information and probably feeling at least a little insecure about what the future holds as we navigate this new global reality around the COVID19 virus.

Since a couple weeks ago, I’ve been having a ton of conversations about stimulus funds and whether it’s a good idea to apply for loans/grant money.

Here’s the deal:

There’s a tendency to go into panic mode at times like this. And all over social media entrepreneurs are screaming about making sure you get your piece of the stimulus pie.

I feel that this scarcity mindset takes things to an unfortunate level. So let’s take a deep breath and do some thinking…

If your business has been directly impacted and you have staff on payroll, then both the PPP (Payroll Protection Plan) and the EIDL (Economic Injury Disaster Loan) programs may be a good option for you to get help keeping your doors open. They both are applied for the in the form of low-interest loans through the SBA (small business administration).

However, if you’re like many of my clients, and you’re working in the online space, it may be that your biz isn’t all that damaged and you may even have more opportunity than before because you have a leg up on others just now entering the virtual business environment.

Things to consider:

1) The stimulus monies are focused on preserving employment, so if you’re a solopreneur the portion of any loans that will be forgiven may be quite small, if any.

2) The lines are long and the bureaucracy is complicated, making some of the loans slow to be delivered. If you’re a client of a small, community bank you may have better luck getting your application approved and money in your account than if you’re applying to the big banks, which are having trouble streamlining the process.

This is not to say it’s not worth applying for money if you’re definitely in need.

Just take the time to review your actual numbers before going through the process. And recognize that you’re likely to have a loan put in place with perhaps some of it being forgiven, we just don’t know how much.

About 90% of my clients have decided, after looking at their projected cash flow and current workload, to not apply for stimulus because they have some cash in the bank, other lines of credit already in place, and/or because their business isn’t really suffering all that much….at least at this point.

Which is something to celebrate!

Instead of looking at it as a failing, we’re having Zen Money dance parties because clients are realizing they’re actually in pretty good financial shape…

Obviously, the longer this new reality takes to settle in, the more changes we’ll see coming down the pike. That may include additional stimulus funding that actually helps small businesses like ours in ways that the current plans do not. Many small mom & pop businesses are in dire straights because of how the PPP and the current EIDL funding is written.

The Bottom Line

I hope that wherever you are, you’re staying well and finding ways to embrace this new reality, whether that’s taking extra walks or playing evening board games with your family.

We will come through this. And remember:

This change is a major chance to reconsider what makes us all tick…including in terms of our business and financial well-being.

So what can you envision for yourself going forward? Spend sometime focusing on that as an alternative to the scarcity talk going on out there.